While Texans often have an overview of the estate planning process, most are unclear of the specifics that constitute an estate plan. Many people will then ask whether a certain asset is included in their estate. However, the answer to this question is highly dependent on the asset itself and how the person is defining “their estate”—as estate can have various meanings. Because this designation may be confusing, estate planning attorneys are here to answer these questions and help Texans in crafting their estate plans.
What Assets are in My “Estate?”
When a person passes away, their estate has different meanings depending on the context. It may refer to their estate for estate tax purposes, their probate estate, or whether an asset is able to be passed onto their heirs. Many people are unaware they must pay a tax if their estate is valued over a certain amount. Individuals whose estate is worth more than $12.06 million must pay a federal estate tax. There is no state estate tax in Texas.
Probate is the legal process in which a will is reviewed by a court to determine whether it is valid and authentic. If an individual has worked with an estate planning attorney to ensure their will is valid before their passing, this process in Texas can be quick and easy. However, for individuals who do not have an estate plan in place (die intestate), the probate court judge will have to determine who will receive the deceased’s assets. Unlike when someone has an estate plan, the intestate probate court process is extremely costly, stressful on the deceased’s family, and can last for years.
Determining if an asset is included in part of an estate can often be complicated. For example, a person’s life insurance policy would count for estate tax purposes—meaning the policy amount would contribute toward the entire value of the estate. However, a life insurance policy with a beneficiary listed would not be subject to probate and is not considered a probate asset. This determination will vary depending on the asset—for example, most property would both count toward the total for the estate tax and be subject to probate court. But in both instances, having an estate plan in place can reduce the worries that come with thinking about the future.
Because estate planning attorneys can advise clients on how assets will be treated for estate taxes and probate purposes, Texans who have questions about this process should contact an experienced attorney in their area.
Contact a Houston Estate Planning Attorney
If you or a loved one needs help drafting an estate plan, contact the Houston estate planning attorneys at McCulloch & Miller, PLLC. We understand that estate planning can be stressful and complicated. Our experienced attorneys are prepared to answer your questions about the estate planning process and work with you to develop an estate plan that fits your needs and specific assets. To schedule a free, initial consultation and to speak with one of our attorneys, give us a call today at 713-333-8900.